SmartyPig: socializing savings accounts

NetBanker has an interesting post about a new banking service called SmartyPig, which socializes savings.

Essentially it combines:

A interest-bearing FDIC insured savings account with a specific goal can be shared with friends and family

An easy way for friends and family to contribute money to your goal directly from a checking account or a gift card

Rebates from partner companies.

So, for instance, a teenager can open an account with the goal to save x thousand dollars to buy a car, have his family contribute directly to the account on this specific goal, and get a rebate from one of the retail partners on the purchase of the car.

I like this idea for multiple reasons:

It’s what a product should be: not technology, but very well-done integration.

It comes at a perfect timing: Americans probably will have to learn to save more and get in debt less as we enter recession and the rest of the world becomes less and less interested to finance them.

It really comes back to the essence of money: a trusted promise between multiple people that increases collective wealth instead of moving it from the havenots to the haves. The manufacturer gets the promise his product will be bought at a certain point of time and can plan production accordingly. Friends and family who contribute get the promise that their money is used for what they intended.

In a nutshell, SmartyPig can be viewed as a small attempt at bringing back the social role of money.

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